While the European Commission, Parliament, and Council may be delaying and scaling back ESG laws, EU regulators are still moving on enforcement and guidance. Recently, the European Securities and Markets Authority (ESMA) issued new guidance for financial firms making sustainability claims. The Thematic Note addresses ESG credentials and offers insights into how to make sustainability claims without greenwashing. A recent Ropes & Gray memo discusses the guidance:
“The European Securities and Markets Authority (ESMA) has taken another step in its ongoing mission to combat greenwashing within the financial services sector. With the release of a new thematic note, ESMA aims to ensure that sustainability claims made by firms are clear, fair, and not misleading. This latest guidance focuses specifically on ‘ESG credentials’—a term that encompasses claims about participation in voluntary alliances or initiatives, ESG labels, ESG awards, and comparisons to peers. Asset managers should review and consider against their own practices.”
The guidance document focuses on four core principles advising that sustainability claims in finance be: accurate, accessible, substantiated, and up to date. These principles should be applied across all external firm communications including marketing and investor engagement. The ESMA guidance asks that firms be more specific and transparent in how they communicate ESG claims. Firms offering ESG products on European markets should review their practices and ensure alignment with the new ESMA guidance.
Actually, to be honest – these guidelines are a good model for use by any company making sustainability claims.
Members can learn more about sustainable finance here.
If you’re not already a member, sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. But it will probably pay for itself before then.
Are you a client of one of our Partners – SourceIntelligence, Kumi, Ecolumix, Elm Consulting Group International or Impakt IQ? Contact them for exclusive pricing packages for PracticalESG.
Practical Guidance for Companies, Curated for Clarity.
